Attorney and Judge Facing Allegations of Fraud Against the Social Security Administration

Earlier this week, a prominent Social Security disability attorney and an equally well-known administrative law judge faced a flurry of questioning before the U.S. Senate pertaining to allegations of fraud and deceit in the pursuit of disability benefits. The duo refused to testify, with attorney Eric C. Conn citing his constitutional right not to incriminate himself. ALJ David Daugherty, on the other hand, left the hearing prior to questioning. Furthermore, they are both defendants in a whistleblower lawsuit under the False Claims Act.

In a report made public earlier this week, the U.S. Senate Committee on Homeland Security and Governmental Affairs classified the case against Conn and Daugherty as “a raft of improper practices by the Conn law firm to obtain disability benefits, inappropriate collusion between Mr. Conn and a Social Security Administrative Law Judge, and inept agency oversight which enabled the misconduct to continue for years.”

Specifically, the two-year investigation revealed a pattern of consistent benefits awards from ALJ Daugherty at a rate approaching 100 percent. All in all, the judge has awarded close to $2.5 billion to Conn’s clients, making Conn the third highest-paid Social Security lawyer in the United States. The report begins by detailing his ascent from a one-room law office in a rural Kentucky trailer to his sprawling legal complex of today, complete with a replica of the Lincoln Memorial. ALJ Daugherty was presiding over and ruling on more disability cases than nearly all other 1,500 disability ALJ’s in the entire United States. The suspicious relationship between the two was finally revealed in an article published in the Wall Street Journal in 2011, prompting a two-year investigation into the impropriety of Conn and Dougherty’s relationship.

Fraud and Misconduct Under the FCA

The FCA was triggered in this case after a finding that Conn and Daugherty were enlisting the assistance of physicians by offering kickbacks for findings of disability. As we have previously reported, the FCA prohibits kickbacks or other forms of remuneration for any physician who then subsequently bills for services through Medicare or Medicaid. As stated in the FCA report, former employees of Conn described these physicians as being cheaper and “you could get them to do what you want.” Citation. A senior analyst at the Social Security Administration testified that “[w]ith Judge Dougherty and Eric Conn, what I [saw] was 100 percent [claim success rate]. If you look at that statistic alone, what’s the likelihood that every claimant who walks into your office is disabled?” citation.

This case commenced after two former employees filed a federal lawsuit against both Conn and Daugherty as whistleblowers under the FCA.

Senator Tom Coburn (R-OK), who spearheaded this investigation, commented “[s]ome in Congress refuse to acknowledge that the disability programs are broken and in dire need of significant oversight. People who are truly disabled will pay the price of our dithering.”

Blowing the Whistle Protects Those Who Truly Need the Resources

Medicare, Medicaid and disability benefits are intended for those who are truly in need. When people take advantage of these programs, resources are unnecessarily depleted, presenting a risk of loss of benefits for those who need them most. If you are aware of suspicious activity in the health care industry, contact a whistleblower attorney right away.